momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.It brings together, managers from the agricultural world and important people from external perspectives, such as health, development, strategy and defense. Its objective is to promote regulationof agricultural markets by creating new evaluation tools, such as economic models and indicators,and by drawing up proposals for an agricultural and international food policy.

Canadian supply management - once again in the spotlight

July 27, 2015

Though a serious livestock crisis is affecting Europe, in Canada, breeders in Quebec are defending their supply management system within the context of Trans-Pacific Partnership (TPP)1. Some 400 farmers from all over Quebec affected by the supply management system, demonstrated on 27th July demanding that the regime be upheld.

So what do these farmers fear? Increased exposure to erratic market fluctuations and the massive influx of milk particularly US milk, boosted by the provisions in the new Farm Bill. In this context, Quebec farmers are questioning: if the Canadians must sacrifice a regulatory policy in place and effective for 30 years, why doesn’t the US do the same with the subsidies it offers its Farmers?

The free trade agreement with the European Union (CETA or AECG) which provides in particular for an increase of 17 000 tonnes of European cheese import quotas had already left a bitter taste in the mouths of Canadian farmers. As for the TPP, though the Fraser Institute has evaluated the potential gains for Canada to no more than 0.5% of total GDP, or about $9 billion, the president of the Union of Agricultural Producers (UPA) Marcel Groleau, particularly estimates that thousands of jobs would be lost if the scheme was abandoned. “It is easy to believe that more than half of the agricultural production under this regime in Canada would be lost with jobs in processing and other sectors. There are 92,000 jobs in Quebec that depend on supply management sectors”, he says. Moreover, the dairy and poultry sectors alone contribute to over 40% of agricultural production in Quebec, representing over $3 billion in farms and more than a quarter of Quebec food processing for a value of nearly $6 billion.

The supply management policy, which inspires many in Europe, in particular for dealing with the dairy crisis which is affecting the Union is a formidable achievement of Canadian agricultural policy. It consists of a regulatory mechanism under which Canadian, milk, poultry and egg producers are adjusting their production to meet the needs of the domestic market. Not only does the Canadian supply management system not cost the taxpayer, but it prevents the release of emergency funds for the rescue of a strategic sector, by protecting it from price hyper-volatility and even more so by providing producers with a stable and fair income.

In this configuration, the compensation for losses - promised by Ottawa under the TPP or with the European Union - would be ultimately a step backwards and little consolation, while the future of the dairy sector in particular and the economic issues related to it, are at stake.